\u201cIn general, things are healthy. There is a great deal of capital that companies can access. The pipelines are strong, and so is innovation.\u201d
\n– Richard Harrison, Chief Scientific Officer, Clarivate Analytics<\/p><\/blockquote>\n
Harrison opened the talk by showing the audience a chart tracking biopharma M&A activity over the last decade (See Figure 1). While 2017 was up in both the number of transactions and overall deal value vs. 10 years ago, the results were down compared to the last few years.<\/p>\n
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Figure 1.<\/strong> Ten years of life sciences M&A transactions (adjusted $$).<\/p>\n One of the key factors influencing biopharma deals, particularly on the M&A side, has been the robustness of the initial public offering (IPO) market, Harrison said, which has given smaller companies options.<\/p>\n \u201cWhat that meant is that companies on the sell side could decide if they wanted to stay independent and finance their work in the public markets or if they wanted to sell to pharma,\u201d Harrison noted. The existence of such options on the sell side can bring \u201celevated expectations\u201d to the deal table, perhaps complicating some potential M&A deals, Harrison added.<\/p>\n Another clear factor, he noted, was that U.S. companies were holding out to see how tax reform in the U.S might make an impact. With the passing of tax cuts, and the effective lowering of corporate rates, he said he expects to see more M&A deals as companies harness cash that has been freed up.<\/p>\n Licensing paced by oncology and neurosciences<\/strong><\/p>\n Harrison talked through several trends visible in Clarivate\u2019s Cortellis database on biopharma licensing, including a look at key 2017 deals. The landscape was dominated by oncology, he noted, to no one\u2019s surprise (See Figure 2).<\/p>\n Figure 2.<\/strong> 2017 licenses by therapeutic area.<\/p>\n \u201cThere was almost exactly the number of oncology licensing transactions as there were last year [in 2016] and the year before,\u201d he said.<\/p>\n But he directed the audience\u2019s attention to the neurosciences, which demonstrated the second-largest number of licenses for the year. \u201cThere is a very strong neurosciences pipeline,\u201d he said. \u201cWe know the industry doesn\u2019t yet have the answers there, but people are working very hard to put the pieces together to get us there.\u201d<\/p>\n Harrison also highlighted the burgeoning geographic diversity among the licensors in biopharma. He said that while the U.S. was the headquarters location for more than half of the sellside companies involved in 2017 transactions, with about 25% from Europe and another 14% from Asia and Australia, in all nearly 50 countries were represented. \u201cThat\u2019s a lot of places in the world now that are contributing to life sciences innovation,\u201d he said.<\/p>\n Going public? \u201cThere is no doubt that our industry has come of age and is truly global.\u201d Figure 3.<\/strong> Notable IPOs 2008-2017.<\/p>\n Winter described a change in how companies have come to perceive IPOs. Whereas going public was once viewed as the ultimate goal for a biopharma, now companies view it as one route among several \u2013 another option, as Harrison had pointed out, also. Winter recalled the intense licensing activity that Harrison had presented, noting that many such partnerships could eventually lead to an acquisition. As a result of that change in perspective, Winter predicted that the number of IPOs each year will likely level off. \u201cMy projection is that 30 or 40 might become the norm,\u201d he said.<\/p>\n So far, the public markets have been strong in 2018, Winter added, with 14 IPOs recorded by BioWorld in Q1. The events collectively raised about $1.2B, with a handful of companies able to raise in excess of $100M each.<\/p>\n \u2018Segment, segment, segment\u2019 He listed the busiest therapeutic areas and the most popular assets listed so far in the partnering system, from vaccines and cell therapies to biosimilars and medical devices. Antibodies, proteins and peptides topped the list (See Figure 4). He noted also that the ontology behind the Therapeutic Area Search in the BIO partnering system has been provided by Clarivate, which means that Cortellis subscribers enjoy \u201cconsistent terminology\u201d across their data as they conduct their searches for the meeting.<\/p>\n Figure 4.<\/strong> Most Popular Asset Types (BIO 2018).<\/p>\n At BIO 2017 in San Diego, the partnering system tracked 41,408 meetings, the most ever, Reaves said. But, he said BIO \u201clooks forward to breaking that record\u201d in Boston, and expects to eclipse 45,000.<\/p>\n You may access and view the entire presentation <\/strong>here<\/strong><\/a>. <\/strong><\/p>\n![\"\"](\"https:\/\/clarivate.com\/wp-content\/uploads\/2018\/05\/Dealmaking-and-BIO-2018-for-LS-Connect-Figures_Page_2-1024x768.png\")
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\nBioWorld\u2019s Winter in his discussion on IPOs also underscored the industry\u2019s global profile. He said that, increasingly, Nasdaq has drawn players from Asia and Australia and that some of the top IPO results have come from Europe (See Figure 3). \u201cThere is no doubt that our industry has come of age and is truly global,\u201d he said.<\/p>\n
\n– Peter Winter, Editor of BioWorld Insight from Clarivate Analytics<\/p><\/blockquote>\n![\"\"](\"https:\/\/clarivate.com\/wp-content\/uploads\/2018\/05\/Dealmaking-and-BIO-2018-for-LS-Connect-Figures_Page_3-1024x768.png\")
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\nBIO\u2019s Reaves closed the session with tips on getting the most out of the one-on-one partnering set-up at BIO 2018 in Boston by segmenting searches to identify the ideal target companies. \u201cThe key word here is segment, segment, segment,\u201d he said.<\/p>\n![\"\"](\"https:\/\/clarivate.com\/wp-content\/uploads\/2018\/05\/Dealmaking-and-BIO-2018-for-LS-Connect-Figures_Page_4-1024x625.png\")
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